President Obama and Mitt Romney spent much of their first debate arguing about taxes.

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Updated at 8:03 AM PDT on Thursday, Oct 4, 2012

President Barack Obama and his Republican challenger, Mitt Romney, met in their first debate Wednesday, arguing about a lot of things: the national deficit, Medicare, Wall Street regulation, and the role of government in people's lives.

But more than anything else, they argued over taxes. And sometimes it got testy, with the president repeatedly accusing Romney of planning tax cuts on such a massive scale that they would send the country into worse financial straits.

"Now, it ultimately is going to be up to the voters, to you, which path we should take," Obama said early on. "Are we going to double-down on the top-down economic policies that helped to get us into this mess? Or do we embrace a new economic patriotism that says America does best when the middle class does best?"

Romney, who has called for a 20 percent across-the-board tax rate cut, accused the president of distorting his plan to rescue the economy. He also said Obama was misguided in seeking solutions through bigger spending and higher taxes on the wealthy.

"The president has a view very similar to the view he had when he ran four years ago, that a bigger government, spending more, taxing more, regulating more - if you will, trickle-down government - would work," said Romney, the former Massachusetts governor who made a fortune as a venture capitalist. "That's not the right answer for America."

Moderator Jim Lehrer attempted to move the conversation along to other subjects, but Obama and Romney frequently interrupted to return to the tax issue.

Obama charged that Romney's tax plan would cut taxes by $5 trillion. "How we pay for that, reduce the deficit, and make the investments that we need to make, without dumping those costs onto middle-class Americans, I think is one of the central questions of this campaign."

Romney, appearing frustrated at having to repeatedly defend himself, shot back: "First of all, I don't have a $5 trillion tax cut. I don't have a tax cut of a scale that you're talking about. My view is that we ought to provide tax relief to people in the middle class. But I'm not going to reduce the share of taxes paid by high-income people. High-income people are doing just fine in this economy. They'll do fine whether you're president or I am."

He went on: "The people who are having the hard time right now are middle- income Americans. Under the president's policies, middle-income Americans have been buried. They're just being crushed. Middle-income Americans have seen their income come down by $4,300. This is a tax in and of itself. I'll call it the economy tax. It's been crushing."

They kept returning to this argument for nearly half of the 90-minute debate, until Lehrer finally persuaded them to move on.

Romney accused Obama of failing to deliver on his promise to cut the federal deficit in half, and instead doubling it. The Republican promised to agressively target wasteful spending, and included on his hit list Obama's health care reform system, known as Obamacare, and subsidies to PBS, where Lehrer works.

"I like PBS, I love Big Bird. Actually like you, too," Romney told Lehrer. "But I'm not going to keep on spending money on things to borrow money from China to pay for."

Obama pointed out that he inherited a trillion-dollar deficit upon taking office in 2008, which he said was caused by "two wars that were paid for on a credit card, two tax cuts that were not paid for, and a whole bunch of programs that were not paid for." After implementing a recovery plan - which included the bailout of the auto industry - Obama said he sought out - and found - a lot of government programs to cut.

"Now, we all know that we've got to do more," the president said. He outlined what he called a "$4 trillion deficit reduction plan" that seeks a dollar in additional revenue for every $2.50 in cuts.

Romney countered: "You found $4 trillion of ways to reduce or to get closer to a balanced budget, except we still show trillion-dollar deficits every year. That doesn't get the job done."

They moved on to Medicare. The president and Romney each argued that they had a plan to preserve it, but differed on how, and accused the other of having a misguided plan.

Obama said that Romney's proposal to provide vouchers for retirees to buy insurance on the private market would not keep pace with inflation. Romney accused Obama of trying to eliminate more than $700 billion from the program. Obama said the cuts would come from ending overpayment of insurance companies.

They argued about Wall Street oversight, with Romney saying that Obama relied too much on tightening regulations on the financial business, primarily by protecting banks that have been deemed "too big to fail." Romney called it "the biggest kiss that's been given to New York banks I've ever seen."

Obama accused Romney of wanting to return to the days of lax regulation that led to the financial crisis.

"Does anybody out there think that the big problem we had is that there was too much oversight and regulation of Wall Street?" Obama said. "Because if you do, then Governor Romney is your candidate."

Although tense and prickly at times, the debate was largely civil and restrained, with each men visibly trying to swallow the urge to call out in protest. They also avoided making any obvious gaffes that the other side could exploit in television ads. They even allowed a couple chuckles, the first coming when Romney tried to break the ice in his opening statement by saying the president could probably have thought of more romantic ways to spend his 20th wedding anniversary.

Romney, trailing by three or so percentage points in most polls and running out of time to turn things around, entered the debate needing to score big against Obama. His challenge was to convince voters that Obama was responsible for mishandling the economy but without coming off as a bully. He also needed to appear presidential – steady, resolute, a quick decision maker who could be trusted to take the reins.

Obama, meanwhile, had one major goal: hold Romney down, and don’t screw up.

Both could say they achieved at least some of those goals.

The final portion of the debate was dominated by an extended argument over the troubles and merits of Obamacare, which Lehrer used to segue to a discussion about the role of government in American life - a subject that arguably represents the widest chasm between the candidates and their parties.

Obama cited his education reform initiative, Race to the Top, as an example of the government investing in new opportunities.

Romney used the moment to repeat his description of Obama's "trickle-down government" approach.

"We know that the path we're taking is not working," he said. "It's time for a new path."

Wednesday’s debate was the first of three before Election Day. The second debate, a town hall meeting-style matchup, will be held Oct. 11 in Hempstead, N.Y. The third, to focus on foreign policy, will be held Oct. 22 in Boca Raton, Fla.